TV ratings overhaul worrying stations

Upcoming changes in the way local TV viewing audiences are measured have local broadcasters and advertisers confused and concerned.

New York-based Nielsen Media Research after the July sweeps period plans to scrap its method of using paper diaries to gather demographic particulars on who watches what in central Indiana and other midsize markets. Instead, it will use data from viewers monitored electronically in larger markets—such as Detroit, Pittsburgh and Washington, D.C.—to project what people in central Indiana are watching.

The new method, which is still being explained to station operators and advertisers, is raising concerns about how locally generated news and entertainment will be tabulated.

Scripps’ Patricia Marsden calls the system “a sea change.”

“This is very complicated and frustratingly convoluted,” said Paul Montgomery, WRTV-TV Channel 6 creative services director. “Local TV stations and ad agencies are concerned. This could be a big game-changer.”

Though Nielsen officials have been making the rounds through the local market in recent weeks to explain the changes, many advertising agencies are still grappling with how the new system works and what it will mean. Nielsen officials were not available for comment.

Just more than 400 households in central Indiana are outfitted with electronic boxes hooked to their TVs, to measure what shows those TVs are tuned to. Nielsen knows the age, gender and ethnicity of the residents of each house with one of those boxes, but does not measure who is watching what.

In a much smaller number of houses in this market—fewer than 80—Nielsen gathers detailed demographic data via electronic boxes for its national survey.

With the new system, Nielsen will look for mirror families—who mostly live in other markets but watch similar shows and have similar backgrounds—to estimate demographic viewing habits for Indianapolis stations.

“I’m in favor of doing away with paper diaries due to inaccuracies, but there are a lot of unanswered questions about this new system,” said Bruce Bryant, president of locally based Promotus Advertising. “The Nielsen ratings are currency. They’re how TV ads are bought and how TV ads are sold. So this is a big issue.”

Nudged to change

Ad agencies often pay fees in excess of $10,000 annually to subscribe to Nielsen, and TV station operators can pay more than 10 times that much for data from several markets, industry sources said. Nielsen has little competition except for Portland, Oregon-based media research firm Rentrak, which might be pushing Nielsen to come up with a better system than diaries. Nielsen also is being pushed by changing technologies, viewer habits and better analytic measuring for Internet viewing.

Ad agencies are more concerned with their own market forces than those affecting Nielsen. Bryant said agencies making “big up-front buys” based on projected ratings could be most at risk. “How can agencies guarantee their clients a certain demographic or rating?” he said.

Up-front buys are usually based on ratings from previous sweeps periods. While some stations will grant advertisers make-good ads if a certain rating threshold isn’t met, that’s not always the case.

Nielsen is calling its new system a “viewer assignment plan,” according to industry sources. Some are calling it hooey.

“Nielsen’s new plan will use model demographics,” said Patricia Marsden, senior director of research for The E.W. Scripps Co., which owns WRTV. “People hear ‘model’ and say that is just a fancy way of making numbers up.”

Marsden called the new system “a little uncomfortable,” but said she is hopeful the additional data it will render will help advertisers “and bring more money into television.”

“This is a sea change for us,” she said.

Montgomery said station operators have a laundry list of concerns, including the system’s accuracy, its ability to calculate which shows are watched via DVR or on the Internet, and measurement for newscasts that air at times unique to the Indy market.

TV news is a big issue, since Indianapolis has more local news than most markets. WISH-TV Channel 8 and WXIN-TV Channel 59, which lead the market in number of hours of local news, might be at particular risk. But stations like WRTV, which recently launched a 4 p.m. newscast, also have concerns.

Bryant

It’s unclear how this system will apply local-news viewing of an out-of-town network affiliate to Indianapolis stations.

Ad revenue from local TV news can constitute 40 percent to 65 percent of a station’s total revenue, by far the biggest chunk. And advertisers often use demographic data, not total number of households watching, as the deciding factor in buying ad time.

Waiting game

The new system comes at a critical time, as 2016 is expected to bring an influx of political advertising—potentially a record year, Bryant said.

Some media buyers think the system will shrink the difference in ratings between the stations.

WTHR-TV Channel 13 is the ratings leader in most local news spots.

“WTHR has the strongest brand and that could favor them in diary reporting,” said Scott Uecker, University of Indianapolis communications instructor and general manager of cable channel UIndy TV. “They have to be concerned about any sort of re-ordering.”

Delia

WTHR General Manager Larry Delia isn’t too concerned—yet.

“We’re hoping this new system will correct any inaccuracies in the current system, and our rating will be even higher,” Delia said.

But he admitted that, despite meeting with Nielsen officials recently, he’s still unclear exactly how the new model will work.

“You’re always concerned whenever a third party measures your audience,” Delia said. “We have our own studies that show we have a strong audience here. We’ll reserve judgment on [Nielsen’s] new system until we know more.”

Local stations and advertisers shouldn’t have to wait long. Station operators said Nielsen officials are promising them a preview of the new data’s impact at the end of the month.

“TV producers and ad buyers have been asking for a better system than the paper diaries for a long time.” Scripps’ Marsden said. “And those cries have grown louder in recent years.”

Diaries rely heavily on a viewer’s memory. Many people wait hours or even days after TV viewing before recording their information. Some participants also either fill out the diaries improperly or fail to return them to Nielsen.

One big upside of the new system is that Indianapolis stations will get detailed demographic data monthly instead of quarterly as they do now. That will be especially helpful with holiday programming and debut shows, which aren’t measurable from a demographics standpoint with paper diaries unless they happen to fall during a sweeps period.

Marsden said the only thing local players can do now is wait, “hoping this is a step in the right direction. This is the sort of thing that keeps people like me up at night.”•

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Reporter, #IBJtech newsletter author

Technology, venture capital, media and marketing

Schoettle grew up in Indianapolis, graduating from Southport High School and Indiana University. He then departed on a tour of middle Indiana, reporting for papers in Greenwood, Frankfort, Columbus and Franklin before landing at IBJ in 1998. At his previous jobs, he spent a decade as a political and government reporter. Beyond writing, Schoettle’s passions include animals and wildlife, watching all manner of television and long-distance cycling and running. Though he put away his trumpet many years ago, he remains an avid music fan. Schoettle shares his home in Southport with his wife, Elizabeth, three salty dogs and three sweet cats. Preferring to live in a “park-like setting,” one of his primary goals each spring and summer is to see how seldom he can mow his front lawn.

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